BUS 670: Legal Environment
Prof. Mark A. Cohen
November 27, 2012
Antitrust Claims faced by Microsoft Valid
Microsoft is a large diversified computer software manufacturer that produces the Windows family of operating systems for personal computers and servers. Bill Gates and Paul Allen founded the company on April 4, 1975. Microsoft is now the world’s largest software maker based on yearly revenue. On May 18, 1978, the United States and the District of Columbia sued Microsoft for illegally monopolizing the market for operating systems for personal computers under the Sherman Antitrust Act. The United States District Court held that Microsoft violated the Sherman Act by unlawfully tying arrangements and engaging in monopolization with regard to the market for Intel-compatible PC operating systems as well as the Web browser market. The Microsoft decision underscored the importance of the proof-of-relevant-market requirement in attempted monopolization cases. Although it affirmed the district court’s holding that Microsoft had engaged in monopolization of the market for Intel-compatible PC operating systems, the United States Court of Appeals for the District of Columbia Circuit reversed the lower court’s decision that Microsoft had attempted to monopolize the Web browser market (Mallor, 2010). Congress passed the Sherman Act in 1890 in response to vast business combinations known as trusts that had emerged in an earlier “new economy,” the period of explosive growth in industry and transportation that followed the Civil War (Page, 2007). No antitrust case in recent history has attracted as much public attention as U.S. v. Microsoft Corp. Nor has any antitrust case in memory raised as many complex, substantive issues of law, economics, and public policy. This volume constitutes an early effort to analyze some of the central issues and to put the...